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Labor Market Emergence and Returns to Education in Rural China


  • Qiang Li
  • Alan de Brauw
  • Scott Rozelle
  • Linxiu Zhang


This paper examines the emergence of labour markets in China through the lens of returns to rural education. It demonstrates that methodology plays an important role in explaining the low estimates of returns in previous studies. When wages are defined on an hourly basis and sample selectivity is controlled, estimated rates of return rise. In addition, using data on households (n=1199) followed over 15 years (1988-2002), the paper shows that returns have risen over time. Finally, using households from the same community, it is shown that the returns rise even more when the sample includes workers with demographic and employment profiles more like those in the rest of the world (i.e., young and working in urban areas). In fact, the paper finds that the returns to education are close to 10% for young wage earners. When looked at in total, the results show that the returns to rural education in China are completely consistent with other developing countries. Finally, these results indicate that China's labour markets are becoming more functional over time.
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  • Qiang Li & Alan de Brauw & Scott Rozelle & Linxiu Zhang, 2005. "Labor Market Emergence and Returns to Education in Rural China ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 27(3), pages 418-424.
  • Handle: RePEc:oup:revage:v:27:y:2005:i:3:p:418-424

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    References listed on IDEAS

    1. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
    2. Papke, Leslie, 1998. "How Are Participanats Investing Their Accounts in Participant-Directed Individual Account Pension Plans?," American Economic Review, American Economic Association, vol. 88(2), pages 212-216, May.
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    Cited by:

    1. Ge, Suqin & Yang, Dennis Tao, 2011. "Labor market developments in China: A neoclassical view," China Economic Review, Elsevier, vol. 22(4), pages 611-625.
    2. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    3. Kym Anderson, 2017. "From taxing to subsidizing farmers in China Post-1978," Departmental Working Papers 2017-13, The Australian National University, Arndt-Corden Department of Economics.
    4. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2008. "Labor market participation of Chinese agricultural households: Empirical evidence from Zhejiang province," Food Policy, Elsevier, vol. 33(4), pages 329-340, August.

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